Hearings and Business Meetings
SD-366 Energy Committee Hearing Room 10:00 AM
Mr. Michael Gadbaw
Vice President for International Law and Policy, General Electric Company
R. Michael Gadbaw
Vice President and Senior Counsel
General Electric Company
Committee on Energy and Natural Resources
July 18, 2006
“Civilian Nuclear Energy and U.S.-India Strategic Cooperation”
Mr. Chairman and Members of the Committee, thank you for the opportunity today to provide a perspective on the role of commercial nuclear energy in U.S.-India strategic cooperation. The burgeoning partnership between the United States and India has profound implications for a wide range of issues—Asian stability, global non-proliferation, Indian economic development, and the renaissance of the nuclear industry—that play into America’s enduring national interests.
GE supports the implementation of this historic agreement, because we believe the strategic partnership that it will advance will serve the interests of both our countries in promoting global peace, security, non-proliferation, and economic development.
GE has had a unique vantage point from which to observe the evolution of this relationship. We believe in the vision that President Bush and Prime Minister Manmohan Singh articulated in their joint statement of March 1, 2006, regarding the role the
Together with many
The Commercial Role in Strategic Energy Cooperation
As you evaluate the policies needed to ensure the success of this agreement, I encourage you to look at how these policies work together. No longer can we divide nuclear policy into distinct compartments, separating security from economics, public policy from private commerce. Consequently, government officials and the private sector must work together to fully integrate the commercial and national security dimensions of government policies.
Secretary of State Condoleezza Rice recognized in her July 10, 2006, speech that
there is a new spirit of partnership between
The U.S.-India relationship will be cemented through social and especially economic exchange. Government policy should be designed to encourage and expand those channels of private activity—nowhere more than the nuclear energy sector, where international security, national economic development, and commercial innovation come together.
’s Energy Needs India
Although coal, oil, and natural gas dominate
The Indian government has set ambitious targets for
Given India’s desire to expand its nuclear capacity so quickly and significantly, U.S. nuclear suppliers have an excellent opportunity to participate in India’s energy development. And expanding the energy supply will also require broader improvements in India’s infrastructure, creating even more opportunities for American companies.
Opportunities for U.S. Nuclear Suppliers
U.S. companies can help the United States to become an integral partner in India’s economic development. As the last U.S.-owned nuclear technology company, GE is committed to do its part. GE’s ABWR (Advanced Boiling Water Reactor) is the most modern and advanced design ever built, with installations in Japan and Taiwan. ABWR has already received NRC certification. Looking to the future, GE’s ESBWR (Economic Simplified Boiling Water Reactor) is cheaper and safer than existing reactor technologies.
France and Russia started early in cultivating political channels into India’s nuclear market. But American companies have the capability to take a leading position as India seeks new reactors. GE not only has great technology, but also a history of successful partnerships in India. The Indians know this from their experience with the Tarapur BWR site, built by GE, which is the lowest-cost source of energy in India according to officials of the Indian Department of Atomic Energy.
Furthermore, India recognizes the political importance of America’s decision to draw closer to it. America has enabled India to enter the nuclear fold. The Indian government understands the inconsistency, then, of excluding competitive American companies from participating in India’s new commercial opportunities.
U.S. Government Policies—Understanding the Security-Commerce Link
U.S. nuclear suppliers can thrive in the Indian market, but government policies must enable them to act rapidly and effectively. And the U.S. government must make clear its expectation that U.S. companies will succeed in India as they have succeeded elsewhere. Government engagement and advocacy are essential.
Again, this means that U.S. policymakers must be sensitive to the link between security and economics. Commerce between America and India creates the linkages, the transparency, and the safeguards that advance our national security—but commerce requires a conducive policy environment. Although crucial, it is not enough to focus only on formal non-proliferation agreements between India and the United States, IAEA, or NSG. The U.S. government must think broadly about a range of policies that accounts for the needs of commerce.
One pressing example is nuclear liability: The International Atomic Energy Agency’s Convention on Supplementary Compensation for Nuclear Damage (CSC) establishes an updated, global system for compensation in the event of a nuclear incident outside the United States. We are pleased that Senate consent to ratify was approved in May by the Senate Foreign Relations Committee and is ready for action by the full Senate. We hope that the Senate Energy and Natural Resources Committee will work promptly on any necessary implementing legislation. This initiative is vital if U.S. companies are to engage foreign nuclear markets. Without a system ensuring compensation and nuclear liability protection, U.S. companies will find the risks of doing business prohibitive. Moreover, key states—like Japan, South Korea, Canada, Ukraine, China, and not least India—are waiting for America to take the lead in joining the CSC, which the United States promoted and was the first country to sign in 1997. They could be persuaded to join if America does so first. The CSC would then reflect a global standard for nuclear liability that could be used to structure legal arrangements with others as well. If America fails to take the lead, however, the CSC will lose momentum and the opportunity could be lost to establish a global standard for compensation and dealing with legal liabilities in this important area.
The U.S.-Indian rapprochement, driven by nuclear-energy cooperation, opens an array of opportunities for U.S. companies. General Electric is ready to support this endeavor. We are confident that, with appropriate government policy and advocacy support, U.S. companies can take a leading role in developing India’s energy capabilities. In the end, American commerce underpins the national security goals that animate the U.S.-India deal, and gives substance to the deal’s domestic aspiration: the renaissance of America’s civilian nuclear industry.
Thank you for your time and attention.
 Report on Growth of Nuclear Energy in India, Department of Atomic Energy, 2004.
 Sumit Ganguly, Testimony before the Committee on Foreign Relations, U.S. Senate, “Energy Trends in China and India: Implications for the United States,” July 26, 2005.
 “India,” Country Analysis Briefs, U.S. Energy Information Administration, http://www.eia.doe.gov/emeu/cabs/India/Full.html (as of December 2005).
 “India’s Vision: Nuclear Energy,” Nuclear Power Corporation of India, Ltd. (NPCIL), presentation by S. Vedmoorthy to the India Energy Symposium, March 2, 2006.
 “A Strategy for Growth of Electrical Energy in India,” Department of Atomic Energy, http://www.dae.gov.in/publ/doc10/index.htm (as of July 17, 2006). Other sources estimate India’s uranium supply to be as high as 78,000 tons. See Ashley J. Tellis, Atoms for War? U.S.-Indian civilian Nuclear Cooperation and India’s Nuclear Arsenal, Carnegie Endowment for International Peace, June 2006, http://www.carnegieendowment.org/files/atomsforwarrevised1.pdf.
 NPCIL, 2006. Originally, the 2020 target was 20,000 MWe; the Indian government recently doubled it.
 Department of Atomic Energy, 2004.